specialreport
BY TOBY GOOLEY, MANAGING EDITOR
The brewing
battle over
the HMT
The Federal Maritime Commission’s current
inquiry into the Harbor Maintenance Tax is no
trifling issue. It could lead to a trade war with
DOES THE HARBOR MAINTENANCE TAX (HMT)
on U.S. imports encourage the diversion of cargo
through Canada and Mexico?
That question—the subject of an ongoing Federal
Maritime Commission (FMC) inquiry—may sound
like an obscure exercise in policy analysis. But the
inquiry has evolved into a debate over much broader
issues, including whether government policies are
putting U.S. seaports at a competitive disadvantage
and are thereby restricting the country’s economic
growth.
Depending on how the government chooses to respond to the FMC’s findings, there could be several potential outcomes: Congress could change the way the HMT is assessed and its funds allocated,
the United States could end up in a dispute with Canada and the World Trade Organization (WTO),
and costs could rise for many importers and exporters.
WASHINGTON’S COMPLAINT
Currently, U.S. importers pay a Harbor Maintenance Tax (HMT) of 0.125 percent on the declared
value of imported merchandise. Established in the 1980s, the tax and its associated Harbor
Maintenance Trust Fund are designed to help fund the U.S. Army Corps of Engineers’ harbor maintenance projects, including dredging. The fund has built up a multibillion-dollar surplus, which critics say is being used to help reduce the federal budget deficit instead of paying for needed waterways
improvements.
The tax generates an average fee of between $84 and $137 per 40-foot container, according to estimates. For high-value cargo such as auto parts, that figure can be as high as $300. For commodities
like lumber and refrigerated produce, it can be less than $20.
